Question

You have just sold your house for 1100000 in cash. Your mortgage was originally a​ 30-year mortgage with monthly payments and an initial balance of 800000. The mortgage is currently exactly​ 18½ years​ old, and you have just made a payment. If the interest rate on the mortgage is ​(APR), how much cash will you have from the sale once you pay off the​ mortgage? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.) Cash that remains after payoff of mortgage is

Answer 1

Answer:

Net amount in hand after paying off loan  $643,068.6  

Explanation:

Note that the interest rate on the mortgage is 5.25% ​(APR) as the question is concerned

Present Value = $800,000

n = 30 * 12 = 360

Annual rate of interest = 5.25%

Monthly rate of interest = 5.25%/12 = 0.44%

Annuity PVF at 0.4375% for 360 months = 181.0926  

Monthly Payment = $800,000/181.09259

Monthly Payment = $4417.63  

Remaining instalments = (360-222) = 138

Annuity PVF at 0.4375% for 138 months = 103.4336  

Loan amount outstanding = $4417.63 * 103.43362

Loan amount outstanding = $456931.4

Loan amount outstanding                              $456,931.4

Amount received on sale of assets               $1,100,000

Net amount in hand after paying off loan  $643,068.6